Market Insights Recap — Week of August 24, 2026

Hello, I'm Steve Orr Chief Investment Officer for Texas Capital's Private Bank.

Today we're going to talk briefly about the economy, what's happening in buyback land and what's going on in the stock market and how these things are going to affect your portfolio. 

The economy's in good shape. July data. A little adequate, a little mixed here and there. But manufacturing and production continue to improve thanks to the one big beautiful bill's one-year CapEx, expensing and of course the AI buildout. Weaknesses a little bit on the consumer side. Walmart, lowest same store sales increase in five years. Now some of their miss on earnings was due to some pharmacy rules. But we're watching the consumer here. And kind of on the consumer handyman side, Lowe's and Home Depot seem to be doing fine.

The Fed remains on hold. Do you remember the 29,000 drop in new jobs in July? Well, here's a historical tidbit. When job creation is under 100,000, the odds of a Fed rate hike in the next six months fall to below 10%. So I don't think the Fed's going to be doing anything anytime soon to raise rates. 

On the policy front, tariffs back in the news. Canada, U.S., no trade deal over the weekend. Here we are $20 billion in items that are going to be tariffed. Doesn't sound like a huge number, but it's just more uncertainty for our business clients and for your portfolios on the stock side. About time, VIX right now is very low. 

What about stocks in general? This time of year heading into September or October, toughest time of the year. Lowest in performance. We're in consolidation right now kind of trending sideways on most of the headlines. That's a good place to be going into September or October. What you don't like is when you're on a downtrend June, July heading in August, heading into September, October. And here we are up two and a half to 4% depending on which index you're looking at right now in August. We're in good shape, and when you lift up the hood, looking at stocks percent above 200-day moving average, very high up in the 70s. So that's good. So most stocks are participating in the rally.

I realize we have a heavy tech concentration right now near 40% when you look at tech and AI-related companies. But right now, they're doing okay. They're treading water. Rest of the market is doing pretty good. Again, internals are looking pretty decent. No need to sell going into September or October. And in fact, I like this 3.5% cash. I'm looking to put more cash to work if I get a dip here heading into midterms. Bonds, rates are going to continue to grind higher despite whatever Bessent does because inflation is here with diesel and gasoline. We're real short on the physical side. So futures are going to start reflecting that lack of physical supply here in the next few months. That's a one to four month bleed into CPI. So you're going to see higher inflation numbers towards the end of the year. Stocks are okay with inflation in the mid threes. Not okay with inflation in the mid fours. So we do need to be a little cautious here towards the end of the year. Right now. Steady as she goes. Till next time.